Rabbi Bruce Pfeffer and his wife Dr. Amy Beth Kressel have 32 solar panels installed on the roof of their home in the 500 block of Holliday Lane in Indianapolis, shown on Thursday, March 29, 2012. Since they are on the back of the house, most cannot be seen from the street. The panels are able to produce about 30 kilowatt hours of solar power each day and use it for their home and a hybrid car. There has been a huge increase in "net metering" in Indiana, where utilities customers with solar panels are able to generate more electricity than they use and get a credit on their bills.(Photo: Charlie Nye / IndyStar.)Buy Photo

One of the most heated, most talked-about pieces of legislation this year imposes new regulations on the small but burgeoning niche of renewable energy producers — while benefiting big utility companies.

With a 37-11 vote Monday, the Indiana Senate sent Senate Bill 309 to Gov. Eric Holcomb.

Holcomb's office declined to comment on his stance, but a spokeswoman said he has been watching the legislation.

The legislation reduces the rate that utility companies pay for excess energy that homeowners, schools and small businesses with solar panels or wind turbines sell back to the grid, an exchange known as net metering.

It met vocal opposition from solar energy enthusiasts, who say they are considering bringing court challenges should the changes become law. But supporters called the final product a compromise.

State Sen. Jim Tomes, R-Wadesville, said he was voting in support of the legislation despite hearing from many constituents who opposed it.

"I'm not trying to ignore the people that have solar power," he said. "I understand that, and I know that they still have concerns and questions, but you can't just keep saying no on everything."

The original proposal had sought to eliminate net metering credits, which would require homeowners to sell their energy to the grid and buy back what they needed. But lawmakers amended it to expand the cap on net metering but provide a smaller financial incentive, postponing the rate change for existing customers, those who install renewable energy technology by the end of the year, and those who might buy those participating properties before the grandfathering provision ends.

Supporters and opponents bickered over "misconceptions" of the proposal, unable to agree, for example, on whether other utility customers shoulder the price of net metering (as utility companies argue), or whether the legislation will encourage or discourage solar energy in the state.

"The bill recognizes solar is an increasingly competitive means of generation," said state Sen. Brandt Hershman, R-Buck Creek, who authored SB 309.

Dave Arland, a spokesman for the Indiana Energy Association, said the legislation also makes way for more large-scale solar farms and for industries to create their own renewable energy generation facilities.

It's one step in energy policy that will have to continue to be built upon, said Greg Ellis, vice president of energy and environmental policy for the Indiana Chamber of Commerce.

"We know it's not the end-all, fix-all," he said.

Still, opponents criticized the legislature for setting what they consider an arbitrary rate for net metering, a task they think is better left to the Indiana Utility Regulatory Commission. They say the legislation leaves room for utility companies to seek additional fees on net metering customers.

They also worry it takes away the incentive to generate renewable energy, since net metering helps offset the cost of installing such technology, and takes away business from solar panel installers.

"This bill was fundamentally about ending net metering in the state of Indiana, strictly after the request of electric utilities as a way to eliminate that competition, which is threatening their revenues and their bottom line," said Kerwin Olson, executive director of the solar-supporting Citizens Action Coalition.